Despite the Central government allocating Rs 5,936 crore for the Polavaram irrigation project in the current fiscal year, the Andhra Pradesh government has failed to utilize the funds even after six months.
Nearly Rs 1,830 crore from the previous year’s sanctioned funds remain to be transferred to the Polavaram single nodal account.
These funds must be spent, and utilization certificates submitted to the Union Ministry of Jal Shakti to qualify for the next tranche of funds.
There is a suspicion that the Naidu government might have diverted the money to some other purposes. The Centre is learnt to have expressed its displeasure over the non-spending of funds even after six months.
According to sources, the Centre had already released advances twice — Rs 2,807 crore and Rs 2,700 crore respectively in the last one year.
The money has to be spent on rehabilitation and resettlement works and if the money is spent, it would help secure further central funding.
The project is now targeted for completion by December 2027. To impound water up to +41.15 meters in the first phase, rehabilitation works must be expedited.
Out of the required 1,00,099 acres of land, 91,157 acres have been acquired as of July 2025, with another 1,989 acres in progress. Awards have been issued for 4,166 acres, but Rs 748.97 crore in compensation payments remain pending.
Of the 38,060 families slated for relocation in the first phase, only 14,371 have been shifted so far. Work on 26 rehabilitation colonies has been completed, while construction continues on 49 others.
Some contractor agreements have been cancelled and about Rs 208.48 crore is due in payments to these contractors. And bills worth Rs 1,027.51 crore in rehabilitation-related are ready for disbursement, sources said.
